Close corporations account for 51 percent of the private sector output and 52 percent of all private employment in the US. Understanding governance issues facing these firms is therefore of considerable importance.(...)

Recent theory posits a new governance channel available to blockholders: threat of exit. The threat of exit, as opposed to actual exit, is difficult to measure directly. However, a crucial property is that the threat of exit is weaker when stock liquidity is lower and vice versa. We use natural...

We investigate whether corporate managers' stock repurchase decisions are affected by their incentives to manage diluted earning-per-share (EPS). We find that managers increase the level of their firms' stock repurchases when: (1) the dilutive effect of outstanding employee stock options (ESOs)...

We examine the relation between managers' disclosure activities and their stock price-based incentives. Managers are privy to information that investors demand and are reluctant to publicly disseminate it unless provided appropriate incentives. We argue that stock price-based incentives in the...

Prior studies have characterized Verrecchias (1983) discretionary disclosure costs mainly in terms of competitive concerns. This study shows that separating the managers and the shareholders into two separate, self-interested beings also leads to disclosure costs, precluding discretionary...

We characterize firms' aggregate reporting quality in an economy where a rational capital market as well as a regulator discipline firms' reporting choices. When the regulator is resource constrained, multiple aggregate reporting choices are possible in equilibrium. This multiplicity is driven...

Prior research finds that intraday stock prices move considerably during the discussion period of earnings conference calls. In this study, we explore what features of the manager-analyst dialogue during the discussion drive these price movements. We textually analyze the tone of managers and...